Roller coasters and yo-yos are among the metaphors frequently used when experts describe cycles of state appropriations for higher education. Recessions bring cuts, but recoveries allow public colleges and universities to regain funds and strength Â at least until the next decline. And anyone who has worked at a public college has seen the pattern. After some tight years, there are usually headlines about legislators and governors approving substantial increases in state support.
A study being released today, however, suggests that thereÂs a reason that many who work at public colleges feel as if their classes are larger, their paychecks are not so large, and their students are having more difficulty getting into courses or paying their bills. The 25-year analysis of state spending on higher education finds that the improved finances that follow a recession rarely restore collegesÂ budgets to levels where they can provide what they had pre-recession.
Monday, October 30, 2006
Saturday, October 28, 2006
Thursday, October 26, 2006
While the [student loan] system has been lucrative for Sallie Mae, it has been downright harmful to the students and taxpayers whose interests federally guaranteed student loans were supposed to serve. Students assume the debt; taxpayers bear the risks, and Sallie Mae reaps the rewards.
She is dead on in her criticism of Sallie Mae causing me once again to wonder why there aren't more of a fiscally conservative/libertarian arguments about the waste in the student loan programs. There is broad political interest in more efficiently using federal resources. The question this column begs is what's her solution?
Wednesday, October 25, 2006
Sallie Mae officials say that provision was needed to encourage lenders to offer private loans at reasonable rates.
"It's a loan being made to borrowers with no income, no near-term job prospects and no collateral," Goulding says. Giving additional bankruptcy protection to lenders, he says, "makes common sense."
Consumer groups counter that providers of private student loans don't deserve special bankruptcy protection, because there are no limits on the fees or interest rates they can charge borrowers. And because these loans lack protections included in federal loans, some borrowers could spend the rest of their lives paying off high-interest student loans, they say.
"The assumption is these people won't get stuck because college always works out financially," says Deanne Loonin, an attorney for the National Consumer Law Center. "I think that's a flawed assumption."
Tuesday, October 24, 2006
He told me that he believes elite liberal arts colleges are in a completely different business from the state schools and community colleges that serve the vast majority of the nations' students, and so they should stop dictating public policy. This is a man with some really interesting ideas about how to move forward in education.
This is probly going to be my last post for a while, so i'll leave you in Luke's and Nathan's capable hands. Take care!
Loan to Learn is making news for the second time in a month. In late September the United States Student Association filed a complaint with the Federal Trade Commission arguing that the company misleads students on its website. Loan to Learn, unlike other private lenders, only offers private or "alternative" loans rather than federally guaranteed loans. As such the company has encouraged students to skip the complicated federal process and just apply for private loans that are on average far more expensive than federal loans.
The background on this issue is that financial aid administrators act as gate keepers between private lenders and students. Administrators have for decades vetted potential lenders and created "preferred lender lists" as a guide for students who are trying to pick a lender from amongst hundreds of similar options. Students are, as you can imagine, very reliant on the preferred lender list, meaning placement on that list (and even the order you appear on the list) can mean more or less borrowers. In this system a good relationship with an administrator can mean millions of dollars for a lender.
Financial aid administrators compose their preferred lender lists entirely out of view of the public. It is a private decision with large public consequences for the students attending that school. While it is virtually impossible to know whether any particular vacation or gift influences the administrators choice of lenders, it is equally impossible to disprove the influence or to ameliorate the concerns of onlookers. The only acceptable way to deal with this issue is to ban vacations, trips, fancy dinners. Some administrators will lament this-arguing that they work hard for students and if in the process they can benefit a little from the corporate largesse who really gets hurt? The answer is American higher education is hurt when the same people who compose financial aid packages are tied up with seedy sales efforts. Administrators are invited on these trips because they coincidentally stand between lenders and potential profit. We should not confuse this coincidence with entitlement to such luxuries.
The apt analogy to the administrator/lender relationship is the politician/corporate interest (contributor). Administrators like politicians have tremendous power that lenders hope to influence for their own financial benefit. It is impossible to know exactly whether a Caribbean vacation will result in Loan to Learn being added to any particular lender list, just like there's now way to know for sure that Jack Abramoff flying politicians to Ireland for golf outings influenced their particular votes. That's why we should set a higher standard for administrators and politicians alike-no expensive vacations, trips, fancy dinners.
Financial aid administrators will be outraged by the inference that a trip would influence their decision to list Loan to Learn or any other particular lender. They must accept that to all the world such a trip looks like an bribe or a kickback. Loan to Learn's Nevis vacation is the most extravagant such trip to get publicity but there are a myriad of smaller trips, dinners, meetings that loan companies run around the country for school officials. While we are discussing an exceptional occurrence, influence peddling is a systematic problem with serious consequences for students and the perception of American higher education.
Monday, October 23, 2006
The potentially fatal flaw here is that whereas sports statistics suggest the caliber of a player, bills passed (much like press clips) are a poor indicator of political efficacy or legislative power. For instance, Tom Delay ranks very low in their rankings, but probably was the most influential House member for the last several years.
Friday, October 20, 2006
The ad that has been on the site during my last couple of click throughs has been the following:
Instant Decision Loan For Tuition, Rent, Etc. Pay After Grad.
There's lots to say on the topic of private (or "alternative) student lending. There have been some good articles on the subject recently and based on the calls I get from reporters it seems to be the new hot topic within student debt. Setting that aside I just wanted to pass along the quote prominently featured on educationfinancepartners.com's website from a university financial aid administrator:
"Education Finance Partners helps students bridge the gap so they can afford the education they are destined to have."What does that mean? (For the record, I'm not sure the word "afford" has much place in a discussion about $200,000 of loans.) But really what does "education they are destined to have" mean? I think it means that students should pursue their "dreams of education" regardless of what it costs. That seems like bad advice to me, especially when we have a higher education system with a wide variety of quality options at different prices. When it comes to paying for college we ought to encourage students and parents to be thoughtful about the consequences of debt. This would seem to suggest the opposite, that people dismiss any consideration of cost to seek out their "destiny." I suppose there's a lot more demand for private student loans when people just focus on their destiny rather than their debt.
"This is about the economy of Massachusetts," Higher Education Chancellor Patricia Plummer said of the new proposals. "The debt burdens that students are taking on only make living here that much more difficult. We want to try to keep young people here in Massachusetts."The idea that "debt burden" is driving major higher education policy reflects a major step forward in public understanding of student loans in the last several years.
As an aside, the goal of keeping talented young college graduates in state is a motivation for a number of state-based efforts like the Maine students Anya has blogged about before. In the past this type of provincial policy focus has encouraged questionable policies like large merit aid programs. However, in these two instances it seems to be driving good policy in the northeast.
Thursday, October 19, 2006
UP is a nonprofit, nonpartisan membership organization for white collar workers, regardless of profession or employment status. We reach out to all unemployed, underemployed and anxiously employed workers -- people who bought the American dream that education and credentials could lead to a secure middle class life, but now find their lives disrupted by forces beyond their control.The organization is responding to the challenges facing recent graduates like lack of affordable health care. Two in five recent college grads will spend at least part of their first year out of school without health care. 30% of 18-24 year olds lack health care with 25-34 year olds doing only slightly better. If this organization did nothing more than make a dent in that number it would go a long way to helping out young Americans.
Wednesday, October 18, 2006
A bit about me-I work for the US Public Interest Research Groups (PIRGs) as our Higher Education Advocate (read: policy analyst, lobbyist) in Washington, DC. The PIRGs were founded in the 1970s on college campuses across the country by students who were tired of watching powerful interests rip off consumers, destroy the environment and who wanted to have a voice on meaningful political issues. Students formed chapters and pooled resources across the state to higher organizers and advocates to work on their behalf. I got my start in activism as a student with the MASSPIRG chapter at Amherst College working to register and mobilize my classmates to vote in the fall of 2000 and to protect 58 million acres of national forests. After I graduated from Amherst I took a job working for the PIRG students as their voice in Washington on higher education issues.
My own work focuses around issues of college access and affordability. It wont come as a surprise to anyone reading this blog, but I believe that we are falling short of our nations goal of equal access to college. According to the Advisory Committee on Student Financial Assistance, 140,000 high school graduates forgo college every year, due largely to the financial barriers. This is an outrage to anyone who values equality of opportunity regardless of race or socioeconomic status. It is also a problem for our country, because we are missing the opportunity to invest in these young people and thereby invest in Americas civic and economic health.
The second major challenge facing American higher education is college affordability. In the face of falling state funding, more schools have pushed the cost of college onto the backs of students through larger loans and more work. I wont go on about the challenge of student debt but I will point you to our website and a report I wrote this spring looking at the impact of student debt on students taking critical public service careers. Student debt is a core issue for this blog and also my work so Ill likely spend a lot of time on it in the coming weeks.
One other note for readers. I'm going to try to keep up with the diverse range of topics that Anya has blogged about, but my own work and life are pretty focused around student organizing, Washington, DC and federal higher education policy. If you see a link or a story that you think should be part of the discussion please email me or post in the comments.
Tuesday, October 17, 2006
"I'm 18 in '08" is about the issues at stake for young people in the next presidential election, when many of us in the baby boomlet generation, like me, will be voting for the first time. The film is also about why young people don’t always vote as heavily as they should, and ultimately the film is a call for young people to get more involved in the political process and of course—vote.
I enjoyed reading your book Generation Debt and I think it raises a great deal of very important issues that can hopefully call young people to the polls in upcoming elections.
As a person dedicated to service myself, and a student who will be voting for the first times in the 2006 midterms and 2008 presidential elections, I have become increasingly concerned with getting out the vote and getting those who will be first time voters in 2008 (myself being one) not only to vote, but to become members of the political process. Having created and grown a film festival for high school students three years ago and witnessed the power of film, I have great faith that this is the most effective way to get young people engaged. Since the start of my work, I have conducted interviews with Senators, Congressmen, policy, and media figures about the issues and taking them to task on what they can do to encourage more young people to get active."
In the meantime, check out this 50-state map of young voters' power, this free pdf on getting out of debt, detailed analysis on the types and amounts of debt held by 25-34-year-olds ("In 2001, 85% of young adults carried at least some debt, compared with 75.1% of all households. ...The median young adult household owes about $25,000...this amount is well above the median of $14,300 for all households"), and a new scholarly work on the economics of being young.
Tuesday, October 10, 2006
That is a simplified way to look at money management: paying off debt is just another investment.